Singapore has amended its tax law to comply with international
standards, paving the way for its inclusion among the Organisation
for Economic Cooperation and Development’s list of white-listed
jurisdictions.
The state is currently on a grey-list of institutions that have
“not substantially implemented” OECD standards on information
exchange. Singapore’s newly passed Income Tax Bill removes the need
for there to be a “domestic interest” for it to co-operate with
foreign requests for information on tax evaders.
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If a state with which it has signed a Double Tax Agreement (DTA)
provides it with relevant information on an individual suspected of
tax evasion, Singapore is compelled to pass on account details.
Other key legislative changes allow for exchange of information on
taxes other than income tax. They include goods and service tax,
stamp duties and property tax. It also provides access to
information from banks and trust companies under certain
conditions.
K Shanmugam, Singapore’s Law Minister, said the new legislation did
not mean the city-state would allow “fishing expeditions” from
other countries.
“The request for information has to be specific, detailed and
relevant to the tax affairs of the tax payer in question,” he
said.
The country currently has 11 tax exchange agreements, one short of
the number needed to be included on the G20’s white list.
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By GlobalDataBankers in Singapore were upbeat on the news, saying it could mean
more client funds would move into the country because of the
greater transparency it will provide.
They believe Singapore may win a greater share of the Middle East
assets booked offshore, which largely go to Switzerland.
Quoted in PBI’s recent country survey of Singapore and Hong Kong
(see PBI 251),
Anthonia Hui of Singapore-based AL Wealth Partners said the
city-state had never set itself up to be a tax haven.
“I think this move was widely anticipated,” she said. “It has been
noted as a trend for some time that there’s no place to hide for
people who have undeclared money. For the Singapore government to
exchange information makes sense if it is done by double tax
treaties and not on a ‘fishing’ basis.
